08KYIV2022, AKHMETOV HOLDS FORTH ON UKRAINIAN POLITICS AND

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C O N F I D E N T I A L KYIV 002022
SIPDIS
E.O. 12958: DECL: 10/10/2018
TAGS: PGOVPINRPRELUP
SUBJECT: AKHMETOV HOLDS FORTH ON UKRAINIAN POLITICS AND
ECONOMICS
REF: KYIV 1145
Classified By: Ambassador for reasons 1.4 (b,d).
Summary
--------
¶1. (C) In a meeting with the Ambassador on October 8,
billionaire industrialist and Party of Regions MP Rinat
Akhmetov expressed support for President Yushchenko's plans
to dissolve the Rada, saying elections were the only
"democratic" way forward for the country. Akhmetov said that
Regions would be together for the upcoming election, and
expressed hope that his party could form a coalition with
Yushchenko's faction after the election. He noted that such
a coalition could be formed if both sides compromise on NATO
MAP and other difficult issues. Akhmetov noted that the
global financial crisis has affected his business, especially
in lower demand for metallurgy products, and would negatively
impact Ukraine's economy in general. He told the Ambassador
that he was still interested in acquiring coal producing
assets in the United States, as it would allow Ukraine to
diversify supplies and lessen its dependence on Russia in the
long-term. End Summary.
Yushchenko: "Brave and Honorable"
---------------------------------
¶2. (C) Akhmetov spoke positively about President Yushchenko
and his push towards early Rada elections. He told the
Ambassador that he was against early elections, but they were
the best and only "democratic" option to pull Ukraine out of
political turmoil. He expressed respect for Yushchenko's
honesty, and said that while Yushchenko won't benefit from
the elections, at least he is not "cheating society" by
creating a coalition that won't work. Yushchenko was a
"brave and honorable" man, Akhmetov said, who remained
consistent in his positions "whether he is in the East or the
West of Ukraine."
Tymoshenko Neither of the Above
--------------------------------
¶3. (C) Akhmetov was critical of PM Tymoshenko's "politics of
populism," and her attempts to create a coalition with
Regions. He was convinced that her only goals are to hold on
to power and "destroy the presidency." There was strong
support in Regions for a pairing with BYuT, but Regions MPs
were only looking at government positions and other "certain
motivations" without thinking about the consequences of a
BYuT/Regions coalition; such a pairing would set the country
back years, Akhmetov claimed. He said he had worked "very
hard" to prevent a coalition with BYuT and had convinced
Yanukovych not to pursue it. Akhmetov said there was "now no
chance" that BYuT and Regions would form a coalition.
Elections: Yushchenko Will Do Well, Regions Will Stay Together
--------------------------------------------- -----------------
¶4. (C) Forecasting a much rosier scenario for Yushchenko than
we've heard anywhere else, Akhmetov told the Ambassador he
expects Yushchenko's bloc would receive a minimum of 15
percent of the votes in early Rada elections. Akhmetov
posited that voters would support Yushchenko because he
hasn't departed from his core values, including his positions
on language and NATO membership. "He comes to Luhansk and
talks about NATO," Akhmetov said in a subtle jab at what many
see as PM Tymoshenko's propensity to change positions, and
appearance, to fit her audience.
¶5. (C) Akhmetov said that Interior Minister Yuriy Lutsenko
and his People's Self-Defense movement is already a branch of
BYuT, so their departure from OU-PSD will not negatively
affect Yushchenko's chances in the Rada election. Similarly,
Akhmetov believed that former Defense Minister and Chairman
of the National Security and Defense Committee Anatoliy
Hrytsenko could leave Yushchenko's bloc with no ill-effects
on Yushchenko's level of popular support.
¶6. (C) Akhmetov complimented NSDC Chair Raisa Bohatyreva and
Rada Speaker Arseniy Yatseniuk, saying that they had bright
futures in Ukrainian politics. But, he added, neither
Bohatyreva nor Yatseniuk could create a credible political
project in time to be competitive in this election. Akhmetov
said Ukrainian politics needs "fresh blood and new faces,"
but said that the election was now, and they are not ready.
¶7. (C) Turning to issues within his party, Akhmetov said that
Regions will stand together for the election, saying that it
would be "inappropriate" to split the party at this time.
Akhmetov underlined his admiration for US politicians'
ability to stay on message, saying that Regions agrees on an
issue, but then everyone goes out and says different things
to the media. He said that Regions is working to develop
message discipline, and will focus their campaign on a
comparison of their achievements in government to the current
coalition's failures.
Regions/Yushchenko/Lytvyn: A "Dream" Coalition
--------------------------------------------- -
¶8. (C) Akhmetov argued that a new coalition with Regions, OU
and the Lytvyn bloc is "what the country needs." He said it
was not possible now, however, because their platforms were
too
different. Akhmetov expressed hope that both Regions and
OU could "cleanse" their party lists of "radicals" to allow
OU and Regions to come together after the election. He said
that the coalition could focus on what unites Ukraine, and
"find compromise on what divides us." He said compromise was
possible if both Regions and OU lose something but "the
country wins."
¶9. (C) Responding to the Ambassador's question about the
foreign policy of such a coalition, Akhmetov said that their
positions on the EU are identical, and that, on NATO
membership, both parties support a national referendum.
Akhmetov said Regions' position is "if the people support it,
we support it." He added that Regions would also support a
referendum on NATO MAP, comparing the position to Germany and
France, whose leaders have stated that they won't vote for
MAP, in part, because a majority of their populations don't
support it. Akhmetov agreed that Regions' position on MAP
differed from Yushchenko's, but again claimed that they could
find compromise. He said that he didn't know what such a
compromise would look like, but said whoever finds it "would
make history" and unite the country.
America Sneezes, Akhmetov and Ukraine Catch Cold
--------------------------------------------- ---
¶10. (C) Turning to the economy, Akhmetov said that he prays
daily for the US economy. He said that his business
interests are feeling the effects of the financial crisis,
and that anyone in Ukraine who hasn't felt it yet will soon
enough. Finding a bright side, Akhmetov said that the
international financial turmoil's effect on Ukraine shows
that its economy is integrated into the global economy: It
will share the pain but will also share in the benefits of
integration.
¶11. (C) Akhmetov said that he can't find markets for his
metallurgy products. For example, a product that previously
sold for more than 1000 dollars in international markets now
finds no buyers at 500 dollars, a price 44 percent below
current production costs. Akhmetov feared that a slowdown in
production would have a cascading effect on Ukraine, as
energy and other input consumption would decrease,
transportation and other services would be scaled back, and
unemployment would rise.
But Akhmetov Still Interested in US Coal Assets
--------------------------------------------- --
¶12. (C) Akhmetov told the Ambassador that his investment in
US coal-producing assets is "still on the agenda." He said
that the current crisis will pass, but Ukraine will always
need coal resources. If Ukraine does not start importing
coal from elsewhere, he said, Ukraine would become more
dependent on Russia. He said that he is also planning to
develop a deep-water port capable of receiving coal imports
by ship as current Ukrainian ports "can't handle them" now.
Akhmetov said that purchasing US coal-producing assets made
good economic sense to him, as there are 30 to 40 years of
reserves in the assets, which will provide energy security
and independence from Russia. He said that he has lined up
financing and has been reassured that lenders are still
interested in going forward with the deal.
A Way Forward on Vanco?
-----------------------
¶13. (C) Akhmetov said that he will buy Shadowlight's shares
in Vanco (Ref A), and has already proposed a purchase price.
When the Ambassador suggested that an international oil
company may be interested in joining the deal, Akhmetov said
it would be an "excellent solution" and suggested that he
could help to transfer shares from Shadowlight to a new
investor. He expressed confidence in the project, adding
that Vanco's problems would have "gone away" if he had agreed
to a BYuT/Regions coalition -- a step he could not take in
good conscience.
Comment
-------
¶14. (C) Akhmetov was very open and engaged throughout the
meeting. We were surprised by his forecast for a strong
Yushchenko election result, a minority opinion in Ukraine.
Akhmetov appeared earnest when complimenting Yushchenko,
echoing a theme we have recently heard from our Regions
contacts, including Party head Yanukovych and nominal party
spokesperson Hanna Herman. This may be a Regions signal for
a potential post-election alliance between themselves and
Yushchenko -- which could be a factor in Yushchenko's
calculus for calling the elections.
TAYLOR

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